The Delhi High Court in the matter Brilltech Engineers Pvt. Ltd. v. Shapoorji Pallonji and Co. Pvt Ltd has held that the dispute would not become non-arbitrable merely because the Petitioner, before filing the application for appointment of arbitrator, has filed a corporate insolvency application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

The High Court rejected the argument that since the petitioner has filed insolvency application which can only be filed for admitted debt and there can be no arbitration for admitted debts. The Court held that it is settled position of law that jurisdiction of NCLT can be invoked only in respect of determined debts, however, merely because a petition has been filed by the petitioner asserting that a definite amount is payable by the respondent, would not imply that the claimed amount has been admitted. The Delhi High Court held that when the respondent has constantly denied its liability to pay, the claimed amount does not transfer into an admitted debt and petitioner can invoke arbitration for resolving the dispute.